Legislature(2007 - 2008)SENATE FINANCE 532
04/23/2007 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB84 | |
| SB125 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 104 | TELECONFERENCED | |
| + | SB 84 | TELECONFERENCED | |
| += | SB 125 | TELECONFERENCED | |
| + | TELECONFERENCED |
CS FOR SENATE BILL NO. 84(JUD)
"An Act relating to the testing and packaging of cigarettes
to be sold, offered for sale, or possessed in this state;
and providing for an effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
9:25:59 AM
Senator Olson, the bill's sponsor, cited cigarettes as being the
leading cause of home fatalities in Alaska and the nation. One-
quarter of cigarette home fire fatalities do not even smoke.
This legislation is an attempt to address this issue by
specifying that "only self-extinguishing cigarettes" could be
sold in the State.
Senator Olson stated that when he was a practicing physician, he
had treated a child for injuries received in a cigarette-related
home fire. That incident has been a major factor in his decision
to sponsor this bill.
9:27:10 AM
DENISE LICCIOLI, Staff to Senator Olson, expressed that in
addition to allowing only self-extinguishing cigarettes to be
sold in the State, this bill would establish testing and
certification requirements to support that mandate.
Ms. Liccioli communicated that while it is impossible to create
a "safe" cigarette, allowing only self-extinguishing or "fire
safe" cigarettes to be sold would have an impact. These "reduced
ignition propensity cigarettes …. are designed to be less likely
than a conventional cigarette to ignite soft furnishings such as
a couch or mattress".
Ms. Liccioli stated that in order to allow these cigarettes to
be easily identified, the bill also included specifics as to how
self-extinguishing cigarette packages should be marked.
Ms. Liccioli reiterated that cigarettes are "the leading cause
of home fire fatalities in Alaska" and the nation. "The most
common material first ignited in home fires is mattresses and
bedding, upholstered furniture, and floor coverings." Fires are
often started by a dropped or forgotten cigarette, as evidenced
in an April 21, 2007 article in the Juneau Empire newspaper
[copy on file] that credited the cause of an April fourth
apartment building fire in Juneau as being a discarded cigarette
that ignited in a couch.
Ms. Liccioli stressed that one-quarter of smoking-related
fatalities are non-smokers and more than one-third of that one-
quarter are children. Studies also indicate that the risk of
dying in a smoking-related residential fire increases with age.
"38 percent of fatal smoking material fire victims are age 65 or
older."
Ms. Liccioli stated that "the most common technology utilized by
cigarette manufacturers for reduced cigarette ignition
propensity [RCIP] … is to make a paper thicker in places to slow
down a burning cigarette". She directed attention to a Coalition
for Fire-Safe Cigarettes handout [copy on file] which included
an image of the RCIP "speed bumps".
Ms. Liccioli explained the speed bump technology. When an
unattended cigarette burns down to the thicker paper speed bump
area, the burning will self-extinguish. In order to qualify as a
self-extinguishing cigarette, a cigarette must meet "established
fire safety performance standards".
Ms. Liccioli advised that similar legislation has been enacted
in New York, Massachusetts, Vermont, New Hampshire, California,
and Illinois. Utah, Kentucky and Oregon have recently passed
such legislation. Canada has enacted a nationwide fire-safe
cigarette mandate.
Ms. Liccioli pointed out that the legislation is supported by
the Alaska Fire Chiefs Association, the Alaska Firefighters
Association, the Department of Public Safety Division of Fire
Prevention, AARP, and numerous other organizations. "There is no
known opposition to this legislation."
Ms. Liccioli concluded that this legislation would save lives,
reduce injuries, and save property. It would, in essence, have
zero fiscal impact as the revenue generated by the fees
established by the bill would exceed the expense the legislation
would incur on the Department of Revenue. That Department is
charged with tracking the cigarettes that are permitted to be
sold in the State. She urged the Committee to support the bill.
9:32:05 AM
Co-Chair Hoffman asked whether this legislation would increase
the cost of a pack of cigarettes.
Ms. Liccioli assured that adoption of the bill would not
increase costs to consumers.
Co-Chair Hoffman asked whether it would increase costs to
cigarette manufacturers.
Ms. Liccioli understood that manufacturers would absorb any
increase in cost if there were any. During discussion on this
bill in a separate committee hearing, the industry had testified
that the "difference in cost to them was negligible".
9:32:52 AM
Senator Thomas asked for further information about the
compliance markings that would be required on each pack of
cigarettes.
Ms. Liccioli specified that, in order to maintain consistency,
the bill would establish marking standards. The bill's language
would allow the State's fire marshal to determine specific
marking requirements. The bill does direct that markings
established in other states should be considered.
Senator Thomas asked why the bill included language that
specified that not more than 25 percent of the cigarettes tested
in a test may exhibit full-length burns.
9:34:12 AM
Ms. Liccioli expressed that this requirement was based on the
"Certificate of Analysis" "Cigarette Ignition Strength Standard"
report compiled by the National Institute of Standards &
Technology (copy on file). That analysis "establishes the
standards for what's acceptable".
9:34:47 AM
Senator Elton questioned the $41,600 fiscal impact reflected in
the Department of Revenue's fiscal note #3, dated March 19,
2007, as that Department currently has a division that maintains
a listing of cigarettes. He thought the bill would have "the
greatest impact" on the Department of Public Safety,
specifically the fire marshal's office, and to a lesser degree,
the Department of Law. He noted, however, that the Department of
Public Safety had submitted a zero fiscal note.
Senator Elton asked for further information about the Department
of Revenue's determination that this legislation would require
an additional one-half time position.
Ms. Liccioli assured Senator Elton that the Department of
Revenue's fiscal note had been discussed. The Department
currently maintains a directory of cigarettes in compliance with
existing State tax laws. That directory is "broad" in the sense
that it would include cigarettes that would not meet the fire-
safe standards identified in this bill.
Ms. Liccioli continued. This legislation would require the
Department to maintain two different lists: one specific to each
fire-safe brand name and brand style cigarette certified fire-
safe by the State; the other specific to which cigarettes in
compliance with State tax laws. Distributors and retailers could
only sell cigarettes listed in both directories.
Ms. Liccioli advised that expanding the directory in this manner
would initially require an additional fulltime position.
Eventually that position would be reduced to halftime.
9:37:23 AM
Senator Elton thought that establishing and maintaining a list
would "be simpler and less resource intensive" than being
professed; therefore, he asked that the Department speak to
their fiscal note.
9:37:53 AM
Senator Dyson also asked whether New York and other states that
have enacted fire-safe cigarette legislation have experienced a
reduction in cigarette related fires.
Ms. Liccioli responded that no in-depth studies have been
conducted in this regard; however, preliminary reports in New
York indicate there has been a reduction in cigarette-related
fires.
9:38:34 AM
JOHANNA BALES, Excise Audit Manager, Tax Division/Anchorage
Office, Department of Revenue, testified via teleconference from
Anchorage to respond to the fiscal note question. She affirmed
that a comprehensive directory of cigarettes "approved for sale
in the State" is currently maintained by the Department. The
entirety of "those cigarettes must be stamped and in compliance
"with the nationwide Master Settlement Agreement (MSA)".
Ms. Bales advised that this legislation would change the manner
in which the Department conducts its cigarette enforcement and
investigation practices. Furthermore, the Department "would be
the primary agency" tasked with ensuring that only fire-save
cigarettes were sold in the State.
Ms. Bales communicated that the current directory includes
approximately 200 brands of MSA compliant cigarettes. The
Department would be required to compile an additional list
specific to fire-safe cigarettes. "Because of the way this"
legislation's language is written, that list would contain
approximately 1,000 different brands of cigarettes.
Ms. Bales specified that the Department would then be required
to compile a third list which would depict those cigarettes in
compliance with both the MSA and the fire-save regulations. In
addition, the Department would be required to conduct an
educational campaign for the approximate 2,000 cigarette product
retailers and distributors in the State.
Ms. Bales surmised that "additional duties" would also be
assigned to the Department.
9:41:10 AM
Co-Chair Stedman asked whether the enforcement process would
become less burdensome as more and more states adopted fire-save
cigarette legislation.
JERRY BURNETT, Legislative Liaison, Department of Revenue,
acknowledged that over time that could be the case. However, the
immediate affect would be that additional work would be levied
on the Department. Thus, it is "reasonable" to request the
additional staffing reflected in the Department's $41,600 fiscal
note.
9:42:19 AM
Senator Elton understood that the testing would be conducted by
other entities and the test results would be provided to the
State Fire Marshall in the Division of Fire Prevention,
Department of Public Safety. A list would then be provided to
the Department of Revenue. It appears that the responsibility of
the Department of Revenue would be "a data entry issue". To that
point, he questioned why this would warrant contractual expenses
and an additional staffing position the initial year and a half-
time position thereafter.
Mr. Burnett asked Ms. Bales to discuss the Department's
responsibilities in this regard.
9:43:21 AM
Ms. Bales clarified that the Department would be the sole entity
responsible for compiling the list. She noted that each
cigarette manufacturer is required to provide their cigarette
marking signatures to both the State Fire Marshal and the
Department of Revenue.
Ms. Bales asserted that the Department is responsible for
compiling and maintaining the directory, and, were this
legislation enacted the Department would be required to maintain
three lists.
Ms. Bales noted that the Department is also the primary
enforcement agency. They seize and destroy cigarettes that are
non-compliant and they must ensure that the entity from whom the
cigarettes were seized has a hearing. All these activities incur
expenses to the Department.
Ms. Bales pointed out that the Department did not receive any
additional funding when the MSA was implemented. Nor, was its
funding increased when it was subsequently directed to develop
the directory of approved MSA cigarettes. These efforts place
fiscal demands on the Department year-round as the directory is
updated constantly. Similar efforts would be applied to the two
additional lists this legislation would require.
Ms. Bales stressed that existing Department responsibilities,
including its auditing activities, are impacted whenever the
Department is asked to absorb additional functions. She
reiterated the expectation that additional duties would be
placed on the Department by this legislation.
Ms. Bales divulged that the $83,000 the State annually receives
from cigarette certification fees typically matches Department
costs; however, this legislation would incur additional
expenses.
9:45:33 AM
WARREN CUMMINGS, President, Alaska Fire Chief's Association and
Fire Chief, City of Fairbanks, testified via teleconference from
Fairbanks in support of the bill. "Cigarettes are the leading
cause of home fire fatalities in the United States, killing 700
to 900 people" annually, including both smokers and non-smokers.
Approximately four people die this way each year in Alaska.
Numerous people are also injured from cigarette related
structure fires.
Mr. Cummings noted that one-quarter of the people injured or
killed in structure fires are not the person who had been
smoking the cigarette. 34 percent of that number is children of
the smoker; 25 percent are their neighbor or friend; 14 percent
are their spouse and partner; and 13 percent are their parent.
Mr. Cummings shared that research conducted in the 1980s
concluded that fire-safe cigarettes would eliminate three out of
four cigarette related fire deaths. Had cigarette manufacturers
begun producing fire safe cigarettes at that time, an estimated
15,000 lives would have been saved to date. 27 lives would have
been saved in Alaska over the past ten years.
Mr. Cummings shared that research conducted in New York
indicates there has been "no decline in cigarette sales" since
fire safe cigarettes were introduced. However, a one-third
reduction in cigarette fire fatalities was experienced during
the first six month period in 2004 when the law went into
effect.
Mr. Cummings urged the Committee to advance this legislation.
9:48:14 AM
JIM CARROLL, Representative, AARP and Juneau Retired Teachers
Association spoke in support of the bill. As a former
firefighter, he has experienced firsthand the aftermath of
cigarette related fires.
9:49:50 AM
DAVID HULL, Vice Chair, Alaska Council on Emergency Medical
Services, spoke in support of the bill. This issue impacts all
the services associated with the Council. It is a life-safety
issue.
Mr. Hull avowed that rather than being an attempt "to regulate
the industry or to restrict smoking"; this legislation "is an
effort to curb needless fires from starting from a carelessly
discarded cigarette". During his 32 years in the medical
services industry, he responded to numerous cigarette related
fires, including a recent apartment building fire in the City
and Borough of Juneau that placed numerous people in harm's way.
The origin of that fire was a discarded cigarette that caught a
couch and ultimately the entire building on fire.
Mr. Hull urged the Committee to pass this legislation. Its goal
is to save lives and property.
9:52:17 AM
Senator Thomas, observing that the safe cigarette language that
would be required on each pack of cigarettes was extensive,
voiced concern that it might overshadow other required warnings.
He also understood that in recent years cigarette manufacturers
have reduced the number of additives included in cigarettes.
This has reduced the tendency for cigarettes to continue to
burn. He was surprised this had not been addressed in the
testimony.
9:53:20 AM
Senator Elton, who had signed on as a bill sponsor, thanked
Senator Olson for initiating the effort. While he considered
this "an important bill" and supported its being reported from
Committee, there were fiscal note issues that should be further
addressed, specifically that the Department of Revenue's fiscal
note did not address enforcement efforts. He also continued to
question the Department's request for additional staffing to
maintain the directory.
9:54:24 AM
Senator Dyson shared his continuing wariness "about government
intrusions and forcing industries to do things that they ought
to be doing on their own". Nonetheless, he exampled a government
intrusion he had supported which dealt with prostate cancer
screening. He had asked the insurance industry why government
had to intervene and force them to cover this since it was "such
a wise thing for them to do for their clients". The response
"behind closed doors" was that "we would if our competition
would do it … we don't want to have to run our rates up a little
and be at a competitive disadvantage".
Senator Dyson concluded that government interference in that
matter was acceptable; it was beneficial to both individuals and
the industry as it placed them "on the same level playing
field". He considered this legislation in the same light.
Cigarette manufacturers would have done this on their own had
everyone done it. Now that numerous states were taking similar
action, he surmised that cigarette manufacturers would
eventually switch to solely producing fire-safe cigarettes
rather than maintaining two production lines.
9:56:18 AM
Co-Chair Hoffman moved to report the bill from Committee with
individual recommendations and accompanying fiscal notes.
There being no objection, CSSB 84(JUD) was REPORTED from
Committee with two previous fiscal notes: $41,600 fiscal note #3
from the Department of Revenue and zero fiscal note #4 from the
Department of Public Safety.
AT EASE 9:56:57 AM / 10:01:38 AM
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